Lufthansa Group records 507 million Euro loss in first quarter
The Lufthansa Group was able to improve its operating result by 103 million euros during the first three months of the current year. However, the economic result for the traditionally weaker first quarter was negatively influenced by the catastrophes in Japan and the political unrest in North Africa with the Group posting an operating loss of 227 million euros.
The Group result of minus 507 million euros includes a negative measurement effect of around 300 million euros from the application of IAS 39. This is contrasted by positive changes in the 'intrinsic values' of financial derivatives amounting to 435 million euros, which are however, in accordance with IAS 39, recognized in equity without effect on profit and loss.
Despite revenue growth, the Passenger Airline Group, the business segment in the Group with the highest revenue, recorded an operating result just below the previous year's figure at minus 391 million euros. In addition to the effects of the catastrophes in Japan and the political unrest in North Africa, the result can also be attributed to the rise in oil prices during the past months and the burdens brought about by the severe winter.
The Passenger Airline Group did achieve a significant reduction of its unit costs. Lufthansa Passenger Airlines, like Germanwings, suffered from the new German air traffic tax that was introduced at the beginning of the year. The airline posted a first-quarter operating loss of 234 million euros. SWISS recorded an operating profit of 17 million euros; Austrian Airlines reduced its operating loss to 64 million euros; bmi entered an operating result of minus 63 million euros; and Germanwings closed the first quarter with an operating loss of 44 million euros.
The development of the Logistics business segment continues to be very positive, with the company not only recording a major increase in revenue, but also an improved operating result of 64 million euros. Lufthansa Cargo managed to sell almost all of its significantly expanded offer and recorded higher average yields, in what was the best quarter in the company's history.
Lufthansa MRO posted an increase in revenue in the face of increasing pressure on margins and earned an operating profit of 69 million euros, almost matching the very good result of the previous year.
Lufthansa does not consider the generally positive development of the current year at risk and the Group's Executive Board therefore continues to anticipate a year-on-year increase in revenue and operating result for 2011. However, the uncertainty surrounding the further developments in Japan and North Africa, as well as their implications with regard to the oil price, do not allow for any further quantification of the full year operating result.
During the first three months of 2011, the Lufthansa Group generated revenues totalling 6.4 billion euros, equivalent to a year-on-year increase of 11.8 per cent. The traffic revenue rose by 14.2 per cent to 5.2 billion euros. During the reporting period, the Group's operating income increased by altogether 12.8 per cent to 7.2 billion euros.
Operating expenses rose by 9.7 per cent to 7.4 billion euros during the first quarter of the year. One important reason for this were the fuel costs, which rose by 297 million euros to a total of 1.4 billion euros; this was equivalent to a year-on-year increase of 27.8 per cent, which was both price and volume related. A positive hedging result of 177 million euros is already included in this amount. The fees and charges were 16.5 per cent above the previous year's figure.